As Canadian commodity prices sank as a rock last fall, Cenovus Energy's oil producer did not pay a single penny from the government's remuneration to Alberta.
In fact, he ended up with a 29 million-dollar credit for royalties in the fourth quarter.
With the province's new program to curb oil extraction in Alberta this year, the situation quickly turned.
As the fall in Canadian crude oil prices shrank in the first three months of the year – and world oil prices rose by a third – the company paid $ 191 million of royalties in the province.
Cenovus CEO Alex Purbey does not complain.
He uses the situation as evidence that the controversial Alberta limiting plan is working.
The province's strategy to hinder oil production in Alberta has turned out to be a two-seat sword for Canada's energy sector, but it is obviously in favor of oil producers like Cenovus – and the provincial government – at that moment.
– We had a situation. , where heavy oil was sold at zero in Alberta. In principle, we gave it for free. The predominant beneficiaries of this cheap oil were the US refineries, "Purbai told reporters Wednesday after his annual meeting.
"In a normal world, we would solve this problem by simply building pipelines. We have not been able to build pipelines at the moment.
"So why, for God's sake, the loss of 200,000 barrels a day (provincial production) will damage our economy by 30 or 40 dollars or 50 billion dollars? That makes no sense. "
The Calgary-based company said Wednesday earnings for the first quarter were $ 110 million, which was a significant improvement over the miserable fourth quarter when it lost more than $ 1.3 billion.
The big loss last year came as a rebate for the Western Canadian Select (WCS) fuel compared to benchmark US prices reaching over $ 50 a barrel.
The economic downturn strengthens the bottom line of oil producers, but also means that industry is largely in a non-growth mode for 2019.
Cenovus reduced its estimated oil production levels by seven percent for the year compared to earlier trends.
The construction of the project to extend the Hristina Lake phase of the company was completed in March, but it is not certain when it will start to produce 50,000 barrels of oil per day.
Pourbaix, however, said the benefits of the cut could easily outweigh the negative effect.
"It is crystal clear that temporary compulsory restraint is a great victory for our industry and for our province," he told analysts during a conference call.
It is not certain what will happen to the boundaries of mandatory production for the rest of the year, but the issue is related to crude oil shipments leaving the province.
Notting Hill's outgoing government, backed by the opposition Conservative Conservative Party, introduced a limitation last January to reduce the accumulation of oil in the warehouses and to strengthen the collapsing Canadian prices.
While Cenovus supported the concept, integrated producers like Imperial Oil opposed government intervention. Imperial has recently pointed out that the price differential has fallen so sharply that the economy has been shattered to transport oil from trains from Alberta to the US Gulf Coast, which requires a distribution of around $ 15 to $ 20 a barrel.
New data from the National Energy Council show that rail transport commodities have fallen by 60% between January and February, supporting Imperial's assessment.
According to Net Energy, the price discount for heavy fuel oil WCS has risen to $ 12.25 a barrel on Wednesday, which is significantly less than the huge price difference of $ 43.55 a barrel in December.
Price cuts have boosted Canadian oil prices but have also circumvented much needed rail transport.
Another problem is the oil storage levels in West Canada, which fell earlier in the year, but began to rise in March, remaining somewhat below the record highs set in January, according to Mike Wals, a senior oil company analyst Genscape Inc.
"On prices, whether (discount) works? Absolutely. Does inventory work? Absolutely not, "Wals said.
The province's original plan was to cut production boundaries in 2019, but it is unclear whether this will happen now that Enbridge's line 3 project is delayed until the second half of next year.
With the new UCP government, which is due to take over at the end of April, the upcoming Prime Minister Jason Kenny will have to determine how quickly Alberta can put an end to the defined production boundaries.
Given the production capacity of the West Canadian oil sector and the expected rail transport movements, "we still will not have to produce about 150,000 to 200,000 barrels per day by the end of the year," said John Morrison, a CIBC analyst, ,
Another major energy problem for the new prime minister will be whether he is doing a promise for a campaign and repeats the Notley Government's plan to rent railroad cars that can carry 120,000 barrels a day from the province.
Cenovus would prefer rail transport services to be placed in the hands of the private sector.
"Do not be fooled, our industry needs more oil on the rail," said Purbai in an interview.
"Once the government has sworn, I will hope to think there is a scenario where the government can sit with the industry to find a way to conclude these rail contracts in the hands of the industry."
One point is clear as the pipeline issue continues to suffocate the province: Alberta has to find more – no less – ways of relocating oil if it wants to put an end to all production restrictions by the end of 2019.
While the two-edged sword is paying dividends today, a comprehensive roadmap for shortening and supply of raw stamp will soon be needed to restore growth in the Canadian oil tanker.
Chris Varku is a journalist from Calgary Herald.